Stampede from Stocks Into Bonds Accelerates

Many other markets in Asia were closed for the Chinese New Year (year of the monkey).

Stocks in Australia and India skidded 2.9% and 1.1%. Compared to a month ago, the Shanghai Composite index has slumped 13.3%.

In Europe, the 10-year German bund yield slipped as low as 0.19%, 44 basis points below the yield level on December 30.

Share prices in Europe fell so far overnight by 5.4% in Greece, 2.3% in Italy, 2.0% in Spain, 2.0% in France, 1.5% in Switzerland, 1.3% in Germany, and 0.8% in Britain. During the past month, stocks have tumbled 31.3% in Greece, 19.1% in Italy, 10.6% in Spain, 10.0% in Germany and 9.1% in Japan.

The U.S. 10-year futures index got as low as 1.68% in overnight trading, a drop of 63 basis points since December 29 and fittingly the lowest level since Ground Hogs Day in 2015.

Currency market action has conformed to what one would expect in an extremely risk averse environment. The Japanese yen rose by a further 0.9% against the dollar overnight. The dollar, in turn, advanced 1.6% relative to the Australian dollar and 0.9% versus the kiwi but fell 0.8% vis-a-vis the Swiss franc and 0.3% relative to the euro. The greenback has edged up 0.2% against sterling and 0.1% versus the loonie, and it is steady against the yuan.

The German current account surplus printed at EUR 25.6 billion in December and widened 17.4% to EUR 249.1 billion in 2015 from EUR 212.1 billion in 2014. Merchandise exports and imports each tumbled 1.6% between November and December, however.

The British goods and services trade deficit in 2015 of 34.7 billion pounds was very similar to its sizes of 34.4 billion pounds in 2014 and 34.2 billion points in 2013. The merchandise trade deficit hit a record high of GBP 125.0 billion, but so too did the services surplus of GBP 90.3 billion.

British same store retail sales posted on-year growth in January of 2.6%, a big improvement over the fourth-quarter months when such respectively dipped 0.2% in the year to October and by 0.4% in November before edging up 0.1% in the year to December.

Dutch factory output increased 2.4% in the year to December, its fourth consecutive on-year advance.

Greek industrial production rose 0.8% on month in December following a 2.5% increase in November.

The NIFB U.S. small business sentiment index fell 1.3 points to a one-year low of 93.9 in January.

U.S. data still to come: Labor Department JOLTS index of job hires and layoffs and weekly Johnson-Redbook chain store sales.

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